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Winning with the Industrial Internet of Things

How to accelerate the journey to productivity and growth.

OVERVIEW

Accenture estimates the Industrial Internet of Things (IIoT) could add $14.2 trillion to the global economy by 2030.

Arguably the biggest driver of productivity and growth in the next decade, the Industrial Internet of Things will accelerate the reinvention of sectors that account for almost two-thirds of world output.

Are companies prepared to take full advantage of this opportunity? Are governments putting the right conditions in place to facilitate progress and capture benefits? Although a few pioneers are reaping rewards from their early investments, widespread adoption is hampered by major challenges.

As the world struggles to emerge from a phase of weak productivity growth, fragile employment and pockets of inadequate demand, businesses and governments need to intensify their efforts and escalate investments.

Backed by recent research and analysis, Accenture believes that the Industrial Internet of Things offers a chance to redefine many sectors and accelerate growth. We outline the opportunities and key actions to take now.

"The Industrial Internet of Things is a network of physical objects, systems platforms and applications that contain embedded technology to communicate and share intelligence with each other, the external environment and with people."

SEIZING THE OPPORTUNITY

Three Actions

Fast-moving companies are establishing entirely new product and service hybrids that disrupt their own markets and generate fresh revenue streams. With this shift, an “outcome economy” will emerge, providing measurable returns—from guaranteed energy savings in commercial buildings to guaranteed crop yields and quality.

Three actions you can take now:

Reimage industry models

Redesign business and operating models to accommodate and support the new product-service hybrids enabled by the IIoT.

Capitalize on the value of data

Generate insights from physical objects and share it between players within supply chains and cross-industry consortia to create new opportunities.

Prepare for the future of work

Invest in new skills and processes that enable human and digital labor to work effectively together. Implement organizational changes that support the more collaborative and autonomous working environment the IIoT will make possible.

ECONOMIC GROWTH

Once the technologies behind the Industrial Internet of Things combine with a number of broader social, economic and political enabling factors, countries can make the most of their productive and innovative potential.

Accenture terms these enabling factors that explain the extent to which countries have woven the IIoT into their economic fabric as a country’s “national absorptive capacity” (NAC). Our ranking of major economies on this metric can help spur policy makers into action. It can also help guide multinational companies looking for suitable locations in which to invest in their various production and service operations.

Accenture estimates that the Industrial Internet of Things could lift real gross domestic product (that is, adjusted for inflation) for 20 major economies by 1.5 percent over trend projections in 2030, with additional investment and enabling factors.

"Electricity changed nearly everything about the way we live and work—and that scale of transformation is possible with the Internet of Things."

Ian Goldin

Director of Oxford Martin School,
University of Oxford

NAC Index
A country with a NAC score of 100 would be the top performer on each of the 55 indicators compared to the other study countries. Overall, the results show that no one country has achieved this level of NAC. In other words, every country has work to do.

BUSINESS READINESS

As they embrace the Industrial Internet of Things, business leaders must consider how their company might offer its own data to an ecosystem of partners to gain the most value or incorporate third-party data to enhance their own services.

Organizational and cultural changes need to be managed while adapting workforce skills, roles and training.

According to recent research, sponsored by Accenture Strategy and the Economist Intelligence Unit, most C-suite executives want to follow the trend rather than lead in the journey to the Industrial Internet. Waiting may be unwise as faster adopters will not only seize market share, but also create new markets.

"Ninety-six percent of respondents said that the senior leadership grasps at least something of the nature of the Internet of Things. Far fewer (38 percent) say their leaders have completely understood it."

Source: From Productivity to Outcomes: Using the Internet of Things to drive future business strategies.

TECHNOLOGY TRANSFORMATION

"The emerging Industrial Internet will provide new growth opportunities by creating the next generation of industrial products and services."

Paul Daugherty
Chief Technology & Innovation Officer

Just like the Internet in the late 1990s, the Industrial Internet of Things is nascent. Recent research as part of a World Economic Forum initiative confirms that the Industrial Internet of Things is transformative: changing the basis of competition, redrawing industry boundaries and creating a new wave of companies.

Massive volumes of data from connected products, and the ability to automate decision making and take actions in real time can translate technology transformation into business opportunities. Four areas to benefit include operational efficiencies, new connected ecosystems coalescing around software platforms, greater collaboration between humans and machines and a large-scale shift from selling products or services to selling measurable outcomes.

OUR IDEAS

The Industrial Internet of Things will transform companies and countries, opening up a new era of economic growth and competitiveness.

Driving Unconventional Growth through the Industrial Internet of Things

In the future, successful companies will use the Industrial Internet of Things to capture new growth through three approaches: boost revenues by increasing production and creating new hybrid business models, exploit intelligent technologies to fuel innovation and transform their workforce.READ MORE

Reimagine the possibilities

We see a future where the intersection of people, data and intelligent machines will have far-reaching impacts on the productivity, efficiency and operations of industries around the world.READ MORE

FURTHER INSIGHTS

Explore the Industrial Internet of Things

Making sense of the Industrial Internet of Things, particularly in the context of a large enterprise, can be challenging. Our technology insights are designed to explore not only what is possible, but also what is feasible.